The Department of Defence should be a dream customer - it pays on time, has large budgets, and structures tenders and responses really well. And, for many of us, a sense of patriotism in working for the defence of the nation. But then it serves up this nonsense ... It spent $90m on defining the capabilities and running the tender process for JP9102 - a major space communications project. But Defence has changed its mind. The whole purpose of CASG is to correctly identify and scope capabilities and to acquire them - it's literally the name on the tin. A reasonable estimate is that the bidders spent $90m themselves building teams to respond to this request, and LM and its partners would have spent more as the "winner", above and beyond payments by Defence. For small Australian teaming partners, this behaviour by their sole customer is a huge drain. I don't know Michael Cratt, but today, let's just note that he's spent $3m, will get nothing back for it, and has to (in public) suck it up as he can't dump his only customer.
"According to head of Air Defence and Space Systems Air Vice-Marshal David Scheul, Defence spent more than $90 million of the approved $150 million under the IIP on the tender process with Lockheed Martin.
However, only a small amount of funding flowed to the multinational for “offer definition and improvement activity”. A revised tender was received by Defence on March 8 and was expected to get second pass approval in Q4 of 2025.
No contract had been signed with Lockheed Martin for the delivery of the satellites yet, according to Mr Deeble.
Of the money spent, $40 million went to the CASG, which was running the tender process, and another $40 million went to the capability manager at the Joint Capabilities Group.
About $3 million was also spent at each of the Defence Digital Group, the Strategy, Policy and Industry Group and the Defence Science and Technology Group. A further $4 million was spent through the Security and Estate Group.
Defence officials said Lockheed Martin had made a “considerable investment” in its JP9102 participation, although they were not sure how much the 12 Australian small to medium-sized businesses a part of Lockheed’s proposed consortium had invested.
Ground station terminal supplier Av-Comm’s chief executive Michael Cratt on Monday said the company “spent over $3 million preparing the organisation to an acceptable level for Defence” and had purchased new office space in anticipation of hiring about 50 additional staff.
“Despite this latest setback faced by our industry, we are determined to not give up. Av–Comm will continue to strive for fair and responsible inclusion of our domestic industry in the global space landscape,” Mr Cratt said.
Manufacturing Spacecraft at Apex | MIT, Stanford GSB, YC
1moExcellent! Let's go!